Legal & General is offering its pre-stakeholder group personal pension with a reducing annual management charge.
The tiered AMC means charges decrease as the cli ent's pension pot grows and hits specified thresholds.
For example, while 1 per cent may be charged on the first £25,000 of a fund, for the next £25,000 the custo mer might only pay 0.8 per cent and above £50,000 the char ges could fall as low as 0.6 per cent.
L&G says it believes the tiered approach is fairer to customers prepared to save for their retirement and offers better value than level-charging products.
The plan features a range of terms which can be tailo red to meet the characteristics of different sch emes, including employer contributions, contracting-out rebates and transfers.
The flexibility of the product also means IFAs have the choice of different commission options.
Pensions marketing dir ector Andy Agar says: “The 1 per cent maximum charge limit under stakeholder provides excellent value for money in the early years when the fund sizes are low.
“However, as funds grow, it can bite heavily into an individual's pot of money, which means giving the provider a windfall through what is effectively a back-end charge.”